{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T07:04:42-04:00", "answer_date": "2024-06-28 07:04:42", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4260165", "url": "\/study-help\/questions\/p646-accounting-for-inventory-using-the-perpetual-inventory-systemlifo-this-4260165", "question_creation_date_js": "2024-06-28T07:04:42-04:00", "question_creation_date": "Jun 28, 2024 07:04 AM", "meta_title": "[Solved] P6-46 Accounting for inventory using the | SolutionInn", "meta_description": "Answer of - P6-46 Accounting for inventory using the perpetual inventory system?LIFO This problem continues the Davis Consulting s | SolutionInn", "meta_keywords": "p6-46,accounting,inventory,perpetual,system,lifo,problem,continues,davis,consulting,situation,p5-45", "question_title_h1": "P6-46 Accounting for inventory using the perpetual inventory system?LIFO This problem continues the Davis Consulting situation from Problem P5-45 in Chapter 5. Consider the January", "question_title": "P6-46 Accounting for inventory using the perpetual inventory system?LIFO This problem continues", "question_title_for_js_snippet": "P6 46 Accounting for inventory using the perpetual inventory system LIFO This problem continues the Davis Consulting situation from Problem P5 45 in Chapter 5 Consider the January transactions for Davis Consulting that were presented in Chapter 5 (Cost data have been removed from the sale transactions ) Davis uses the perpetual inventory system Jan 2 Completed a consulting engagement and received cash of $7,800 Jan 2 Prepaid three months office rent, $1,650 Jan 7 Purchased 80 units software inventory on account, $1,680, plus freight in, $80 Jan 18 Sold 40 software units on account, $3,500 Jan 19 Consulted with a client for a fee of $1,000 on account Jan 20 Paid employee salary, $2,055, which includes accrued salaries from December Jan 21 Paid on account, $1,760 Jan 22 Purchased 240 units software inventory on account, $6,240 Jan 24 Paid utilities, $250 Jan 28 Sold 120 units software for cash, $4,680 Jan 31 Recorded the following adjusting entries a Accrued salaries expense, $686 b Depreciation, $100 (Equipment, $30 Furniture, $70) c Expiration of prepaid rent, $550 d Physical count of software inventory, 145 units Requirements 1 Prepare perpetual inventory records for January for Davis using the LIFO inventory costing method (Note You must calculate the cost of goods sold on the 18th, 28th, and 31st ) 2 Open the following T accounts in the ledger Cash, $16,400 Accounts Receivable, $1,750 Software Inventory, $0 Office Supplies, $200 Prepaid Rent, $0 Equipment, $1,800 Accumulated Depreciation Equipment, $30 Furniture, $4,200 Accumulated Depreciation Furniture, $70 Accounts Payable, $4,700 Salaries Payable, $685 Unearned Revenue, $700 Davis Capital, $18,165 Davis, Withdrawals, $0 Income Summary, $0 Service Revenue, $0 Sales Revenue, $0 Cost of Goods Sold, $0 Salaries Expense, $0 Rent Expense, $0 Utilities Expense, $0 Depreciation Expense Equipment, $0 and Depreciation Expense Furniture, $0 3 Journalize and post the January transactions using the perpetual inventory record created in Requirement 1 Compute each account balance, and denote the balance as Bal 4 Journalize and post the adjusting entries Denote each adjusting amount as Adj Compute each account balance, and denote the balance as Bal After posting all adjusting entries, prove the equality of debits and credits in the ledger I have attached the template and other documents that might help to solve the problem Thanks DAVIS CONSULTING Worksheet December 31, 2014 Account Names Cash Accounts Receivable Office Supplies Equipment Accu Depr Equipment Furniture Accu Depr Furniture Accounts Payable Unearned Revenue Salaries Payable Davis, Capital Davis, Withdrawals Service Revenue Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep ExpenseEquip Dep ExpenseFurniture Total Unadjusted Trial Balance Debit Credit $16,400 1,200 900 1,800 Adjustments Debit Credit a $550 $700 c 30 Adjusted Trial Balance Debit Credit $16,400 $1,750 $200 $1,800 d 4,200 70 d 685 e 550 700 b 30 a b $4,200 70 4700 700 685 18000 700 18,000 1,400 70 4700 700 685 18000 $1,400 2,600 550 250 c e d d $26,700 $2,735 $1,400 3150 700 $550 $250 $700 $685 $30 $70 700 685 30 70 $2,735 Balance Sheet Debit Credit $16,400 $1,750 $200 $1,800 30 $4,200 $4,700 1,400 $26,700 Income Statement Debit Credit $28,035 3850 $550 $250 $700 $685 $30 $70 $28,035 Net Income Total $2,285 1,565 $3,850 $3,850 $25,750 $3,850 $25,750 FILLING OUT THIS TEMPLATE IS OPTIONAL YOU WILL NOT LOSE POINTS IF YOU CHOOSE NOT TO FILL IT OUT Keep in mind that it is very useful to help with the remaining requirements $24,185 1,565 $25,750 DAVIS CONSULTING Income Statement Month Ended December 31, 2014 Revenues Service revenue Expenses Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep ExpenseEquip Dep ExpenseFurniture Total expenses Net Income Available accounts Service Revenue Supplies Expense Salary Expense Rent Expense Utilities Expense Dep ExpenseFurniture Dep ExpenseEquipment 3,850 550 250 700 685 30 70 2,285 1,565 DAVIS CONSULTING Statement of Owner's Equity Month Ended December 31, 2014 Davis, Capital, December 1, 2014 Owner contribution Net income for the month Owner withdrawal Davis, Capital, December 31, 2014 18,000 1,565 19,565 1,400 18,165 DAVIS CONSULTING Balance Sheet December 31, 2014 Assets Current Assets Cash Accounts Receivable Office Supplies Total Current Assets Plant Assets Equipment Less Accu Depr Equipment Furniture Less Accu Depr Furniture Total Plant Assets Total Assets 16,400 1,750 200 18,350 1,800 30 4,200 70 1,770 4,130 5,900 24,250 Liabilities Current Liabilities Accounts Payable Unearned Revenue Salaries Payable Total Liabilities 4,700 700 685 6,085 Owner's Equity Davis, Capital Total Liabilities and Owner's Equity 18,165 24,250 Date Accounts Dec 31 Service revenue Income summary Debit 3,850 Credit 3,850 31 Income summary Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep ExpenseEquip Dep ExpenseFurniture 2,285 31 Retained earnings Withdrawls 1,400 31 Income Summary Retained Earnings 1,565 550 250 700 685 30 70 1,400 1,565 Available accounts for journal entries Service Revenue Income Summary Income Summary Salaries Expense Supplies Expense Rent Expense Utilities Expense Dep ExpenseEquipment Dep ExpenseFurniture Income Summary Davis, Capital Davis, Capital Davis, Withdrawals Dec 2 Dec 18 Dec 21 Dec 28 Cash 18,000 1,100 1,400 300 Balance 16,400 550 1,800 250 400 1,400 Dec 2 Dec 3 Dec 12 Dec 26 Dec 30 Dec 26 Dec 5 Balance Dec 3 Balance 1,500 Service Revenue 4,200 900 4,700 1,500 1,100 Unearned Revenue 300 Office Supplies 900 Dec 28 Adj Dec 21 Balance Dec 2 Balance Balance Adj Balance Dec 12 Balance Balance Salaries Payable Adj Equipment 1,800 1,800 Davis, Capital 18,000 18,000 18,000 Accumulated DepreciationEquipment 30 30 Furniture 4,200 4,200 Dec 30 Balance Balance Clos Clos Accumulated DepreciationFurniture 70 70 Dec 2 Balance Clo Balance Adj Balance Balance Davis, Withdrawals Adj Balance Adj Balance 1,400 1,400 Income Summary 2,285 1,565 Dec 9 Dec 18 Adj Adj Balance Balance Rent Expense 1,400 Clo Dec 4 Balance Dec 4 Dec 5 Balance Clo Accounts Receivable Dec 9 Adj Balance Accounts Payable 400 550 550 Clo Utilities Expense 250 250 Supplies Expense 700 700 Clo 700 Clo 685 Clo Salaries Expense 1,400 Clo Adj Balance Balance 3,850 Clo Bal Balance Adj Balance Balance Adj Balance Balance 685 685 Depreciation ExpenseEquipment 30 30 30 Clo Depreciation ExpenseFurniture 70 70 70 Clo DAVIS CONSULTING Post Closing Trial Balance December 31, 2014 Account Title Cash Accounts Receivable Office Supplies Equipment Accumulated DepreciationEquipment Furniture Accumulated DepreciationFurniture Accounts Payable Unearned Revenue Salaries Payable Davis, Capital Total Balance Debit 16,400 1,750 200 1,800 Credit 30 4,200 24,350 70 4,700 700 685 18,165 24,350 Perpetual Inventory Record LIFO Date Quantity Purchases Unit Cost Total Cost Quantity Cost of Goods Sold Unit Total Cost Cost Quantity Jan 7 18 22 28 31 Totals Calculations Unit cost of inventory purchased (a) Total cost Total number of units Jan 7 purchase (b) Jan 22 purchase (c) Units adjustment for inventory shrinkage per physical count per inventory records adjustment needed Inventory on Hand Unit Total Cost Cost Date Jan 2 Accounts and Explanation Debit Credit Available accounts for journal entries Jan 2 Jan 7 Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 24 Jan 28 For cost of inventory purchased remember to add freight in Cash Service Revenue Prepaid Rent Cash Software Inventory Accounts Payable Accounts Receivable Sales Revenue Cost of Goods Sold Software Inventory Accounts Receivable Service Revenue Salaries Payable Salaries Expense Cash Accounts Payable Cash Software Inventory Accounts Payable Utilities Expense Cash Cash Sales Revenue Cost of Goods Sold Software Inventory Bal Jan 2 Jan 28 Cash 16,400 Jan 2 Jan 20 Jan 21 Jan 24 Jan 21 Accounts Payable 4,700 Service Revenue Bal Jan 7 Jan 22 Bal Jan 2 Jan 19 Bal Bal Bal Jan 18 Jan 19 Bal Bal Jan 7 Jan 22 Bal Bal Bal Bal Jan 2 Accounts Receivable 1,750 Software Inventory 0 Jan 20 Salaries Payable 685 0 Sales Revenue Bal Bal Jan 18 Jan 28 Bal Unearned Revenue Cost of Goods Sold Jan 18 700 Bal Jan 18 Jan 28 700 Bal Jan 28 Bal Bal Bal Jan 20 Bal Office Supplies 200 200 Davis, Capital 18,165 18,165 Prepaid Rent 0 Davis, Withdrawals Bal Salaries Expense Utilities Expense 0 Jan 24 Bal Bal Equipment 1,800 1,800 Rent Expense Accumulated DepreciationEquipment 30 Bal 30 Bal Depreciation ExpenseEquipment Furniture 4,200 4,200 Depreciation ExpenseFurniture Bal Bal Bal Bal Accumulated DepreciationFurniture 70 Bal 70 Bal Date Jan 31 Jan 31 Jan 31 Jan 31 Accounts and Explanation Debit Credit Available accounts for journal entries Salaries Expense Salaries Payable Depreciation ExpenseEquipment Depreciation ExpenseFurniture Accumulated DepreciationEquipment Accumulated DepreciationFurniture Rent Expense Prepaid Rent Cost of Goods Sold Software Inventory Bal Jan 2 Jan 28 Cash 16,400 Jan 21 Accounts Payable 4,700 Jan 20 Jan 2 Jan 20 Jan 21 Jan 24 Salaries Payable 685 Service Revenue Bal Jan 7 Jan 22 Bal Jan 2 Jan 19 Bal Bal Bal Jan 18 Jan 19 Bal Accounts Receivable 1,750 Software Inventory Jan 7 Jan 22 Sales Revenue Bal Adj Bal Unearned Revenue 700 Bal 700 Bal Jan 18 Jan 28 Adj Bal Bal Bal Office Supplies 200 200 Davis, Capital 18,165 18,165 Prepaid Rent Jan 2 Bal Bal Bal Adj Equipment 1,800 1,800 Accumulated DepreciationEquipment 30 Bal Adj Bal Bal Bal Furniture 4,200 4,200 Accumulated DepreciationFurniture 70 Bal Adj Bal Bal Davis, Withdrawals 0 Jan 18 Jan 28 Bal Cost of Goods Sold Jan 18 Jan 28 Adj Bal Salaries Expense Bal Bal Jan 20 Adj Bal Utilities Expense Jan 24 Bal Rent Expense Adj Bal Depreciation ExpenseEquipment Adj Bal Depreciation ExpenseFurniture Adj Bal DAVIS CONSULTING Adjusted Trial Balance January 31, 2015 Account Title Balance Debit Cash Accounts Receivable Software Inventory Office Supplies Prepaid Rent Equipment Accumulated DepreciationEquipment Furniture Accumulated DepreciationFurniture Accounts Payable Salaries Payable Unearned Revenue Davis, Capital Service Revenue Sales Revenue Cost of Goods Sold Salaries Expense Utilities Expense Rent Expense Depreciation ExpenseEquipment Depreciation ExpenseFurniture Total Credit P545 Journalizing purchase and sale transactions, making closing entries, preparing financial statements, and computing the gross profit percentage This problem continues the Davis Consulting situation from Problem P439 of Chapter 4 Davis Consulting performs systems consulting The company has also begun selling accounting software and uses the perpetual inventory system to account for software inventory During January, Davis Consulting completed the following transactions Jan 2 Completed a consulting engagement and received cash of $7,800 Jan 2 Prepaid three months office rent, $1,650 Jan 7 Purchased 80 units software inventory on account, $1,680, plus freight in, $80 Jan 18 Sold 40 software units on account, $3,500 (cost $880) Jan 19 Consulted with a client for a fee of $1,000 on account Jan 20 Paid employee salaries, $2,055, which includes accrued salaries from December Jan 21 Paid on account, $1,760 Jan 22 Purchased 240 units software inventory on account, $6,240 Jan 24 Paid utilities, $250 Jan 28 Sold 120 units software for cash, $4,680 (cost $2,960) Jan 31 Recorded the following adjusting entries a Accrued salaries expense, $686 b Depreciation, $100 (Equipment, $30 Furniture, $70) c Expiration of prepaid rent, $550 d Physical count of software inventory, 145 units, $3,770 Requirements 1 Open the following Taccounts in the ledger Cash, $16,400 Accounts Receivable, $1,750 Software Inventory, $0 Office Supplies, $200 Prepaid Rent, $0 Equipment, $1,800 Accumulated Depreciation Equipment, $30 Furniture, $4,200 Accumulated DepreciationFurniture, $70 Accounts Payable, $4,700 Salaries Payable, $685 Unearned Revenue, $700 Davis Capital, $18,165 Davis, Withdrawals, $0 Income Summary, $0, Service Revenue, $0 Sales Revenue, $0 Cost of Goods Sold, $0 Salaries Expense, $0 Rent Expense, $0 Utilities Expense, $0 Depreciation ExpenseEquipment, $0 and Depreciation Expense Furniture, $0 2 Journalize and post the January transactions Compute each account balance, and denote the balance as Bal 3 Prepare the month ended January 31, 2015 income statement of Davis Consulting Using the multi step format List Service Revenue under gross profit and ignore classifying the expenses as selling and administrative 4 Journalize and post the closing entries Denote each closing amount as Clo After posting all closing entries, prove the equality of debits and credits in the ledger 5 Compute the gross profit percentage of Davis Consulting", "question_description": "

P6-46 Accounting for inventory using the perpetual inventory system?LIFO This problem continues the Davis Consulting situation from Problem P5-45 in Chapter 5. Consider the January transactions for Davis Consulting that were presented in Chapter 5. (Cost data have been removed from the sale transactions.) Davis uses the perpetual inventory system. Jan. 2 Completed a consulting engagement and received cash of $7,800. Jan. 2 Prepaid three months office rent, $1,650. Jan. 7 Purchased 80 units software inventory on account, $1,680, plus freight in, $80. Jan. 18 Sold 40 software units on account, $3,500. Jan. 19 Consulted with a client for a fee of $1,000 on account. Jan. 20 Paid employee salary, $2,055, which includes accrued salaries from December. Jan. 21 Paid on account, $1,760. Jan. 22 Purchased 240 units software inventory on account, $6,240. Jan. 24 Paid utilities, $250. Jan. 28 Sold 120 units software for cash, $4,680. Jan. 31 Recorded the following adjusting entries: a. Accrued salaries expense, $686 b. Depreciation, $100 (Equipment, $30; Furniture, $70) c. Expiration of prepaid rent, $550 d. Physical count of software inventory, 145 units.Requirements 1. Prepare perpetual inventory records for January for Davis using the LIFO inventory costing method. (Note: You must calculate the cost of goods sold on the 18th, 28th, and 31st.) 2. Open the following T-accounts in the ledger: Cash, $16,400; Accounts Receivable, $1,750; Software Inventory, $0; Office Supplies, $200; Prepaid Rent, $0; Equipment, $1,800; Accumulated Depreciation-Equipment, $30; Furniture, $4,200; Accumulated Depreciation-Furniture, $70; Accounts Payable, $4,700; Salaries Payable, $685; Unearned Revenue, $700; Davis Capital, $18,165; Davis, Withdrawals, $0; Income Summary, $0; Service Revenue, $0; Sales Revenue, $0; Cost of Goods Sold, $0; Salaries Expense, $0; Rent Expense, $0; Utilities Expense, $0; Depreciation Expense-Equipment, $0; and Depreciation Expense-Furniture, $0. 3. Journalize and post the January transactions using the perpetual inventory record created in Requirement 1. Compute each account balance, and denote the balance as Bal. 4. Journalize and post the adjusting entries. Denote each adjusting amount as Adj. Compute each account balance, and denote the balance as Bal. After posting all adjusting entries, prove the equality of debits and credits in the ledger. ****I have attached the template and other documents that might help to solve the problem. Thanks \"image<\/p> DAVIS CONSULTING Worksheet December 31, 2014 Account Names Cash Accounts Receivable Office Supplies Equipment Accu. Depr.Equipment Furniture Accu. Depr.Furniture Accounts Payable Unearned Revenue Salaries Payable Davis, Capital Davis, Withdrawals Service Revenue Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep. ExpenseEquip. Dep. ExpenseFurniture Total Unadjusted Trial Balance Debit Credit $16,400 1,200 900 1,800 Adjustments Debit Credit a. $550 $700 c. 30 Adjusted Trial Balance Debit Credit $16,400 $1,750 $200 $1,800 d. 4,200 70 d. 685 e. 550 700 b. 30 a. b. $4,200 70 4700 700 685 18000 700 18,000 1,400 70 4700 700 685 18000 $1,400 2,600 550 250 c. e. d. d. $26,700 $2,735 $1,400 3150 700 $550 $250 $700 $685 $30 $70 700 685 30 70 $2,735 Balance Sheet Debit Credit $16,400 $1,750 $200 $1,800 30 $4,200 $4,700 1,400 $26,700 Income Statement Debit Credit $28,035 3850 $550 $250 $700 $685 $30 $70 $28,035 Net Income Total $2,285 1,565 $3,850 $3,850 $25,750 $3,850 $25,750 FILLING OUT THIS TEMPLATE IS OPTIONAL YOU WILL NOT LOSE POINTS IF YOU CHOOSE NOT TO FILL IT OUT ** Keep in mind that it is very useful to help with the remaining requirements. $24,185 1,565 $25,750 DAVIS CONSULTING Income Statement Month Ended December 31, 2014 Revenues: Service revenue Expenses: Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep. ExpenseEquip. Dep. ExpenseFurniture Total expenses Net Income Available accounts: Service Revenue Supplies Expense Salary Expense Rent Expense Utilities Expense Dep. ExpenseFurniture Dep. ExpenseEquipment 3,850 550 250 700 685 30 70 2,285 1,565 DAVIS CONSULTING Statement of Owner's Equity Month Ended December 31, 2014 Davis, Capital, December 1, 2014 Owner contribution Net income for the month Owner withdrawal Davis, Capital, December 31, 2014 18,000 1,565 19,565 1,400 18,165 DAVIS CONSULTING Balance Sheet December 31, 2014 Assets Current Assets: Cash Accounts Receivable Office Supplies Total Current Assets Plant Assets: Equipment Less: Accu. Depr.Equipment Furniture Less: Accu. Depr.Furniture Total Plant Assets Total Assets 16,400 1,750 200 18,350 1,800 30 4,200 70 1,770 4,130 5,900 24,250 Liabilities Current Liabilities: Accounts Payable Unearned Revenue Salaries Payable Total Liabilities 4,700 700 685 6,085 Owner's Equity Davis, Capital Total Liabilities and Owner's Equity 18,165 24,250 Date Accounts Dec. 31 Service revenue Income summary Debit 3,850 Credit 3,850 31 Income summary Rent Expense Utilities Expense Supplies Expense Salaries Expense Dep. ExpenseEquip. Dep. ExpenseFurniture 2,285 31 Retained earnings Withdrawls 1,400 31 Income Summary Retained Earnings 1,565 550 250 700 685 30 70 1,400 1,565 Available accounts for journal entries: Service Revenue Income Summary Income Summary Salaries Expense Supplies Expense Rent Expense Utilities Expense Dep. ExpenseEquipment Dep. ExpenseFurniture Income Summary Davis, Capital Davis, Capital Davis, Withdrawals Dec. 2 Dec. 18 Dec. 21 Dec. 28 Cash 18,000 1,100 1,400 300 Balance 16,400 550 1,800 250 400 1,400 Dec. 2 Dec. 3 Dec. 12 Dec. 26 Dec. 30 Dec. 26 Dec. 5 Balance Dec. 3 Balance 1,500 Service Revenue 4,200 900 4,700 1,500 1,100 Unearned Revenue 300 Office Supplies 900 Dec. 28 Adj. Dec. 21 Balance Dec. 2 Balance Balance Adj. Balance Dec. 12 Balance Balance Salaries Payable Adj. Equipment 1,800 1,800 Davis, Capital 18,000 18,000 18,000 Accumulated DepreciationEquipment 30 30 Furniture 4,200 4,200 Dec. 30 Balance Balance Clos. Clos. Accumulated DepreciationFurniture 70 70 Dec. 2 Balance Clo. Balance Adj. Balance Balance Davis, Withdrawals Adj. Balance Adj. Balance 1,400 1,400 Income Summary 2,285 1,565 Dec. 9 Dec. 18 Adj. Adj. Balance Balance Rent Expense 1,400 Clo. Dec. 4 Balance Dec. 4 Dec. 5 Balance Clo. Accounts Receivable Dec. 9 Adj. Balance Accounts Payable 400 550 550 Clo. Utilities Expense 250 250 Supplies Expense 700 700 - Clo. 700 Clo. 685 Clo. Salaries Expense 1,400 Clo. Adj. Balance Balance 3,850 - Clo. Bal. Balance Adj. Balance Balance Adj. Balance Balance 685 685 - Depreciation ExpenseEquipment 30 30 30 - Clo. Depreciation ExpenseFurniture 70 70 - 70 Clo. DAVIS CONSULTING Post-Closing Trial Balance December 31, 2014 Account Title Cash Accounts Receivable Office Supplies Equipment Accumulated DepreciationEquipment Furniture Accumulated DepreciationFurniture Accounts Payable Unearned Revenue Salaries Payable Davis, Capital Total Balance Debit 16,400 1,750 200 1,800 Credit 30 4,200 24,350 70 4,700 700 685 18,165 24,350 Perpetual Inventory Record: LIFO Date Quantity Purchases Unit Cost Total Cost Quantity Cost of Goods Sold Unit Total Cost Cost Quantity Jan. 7 18 22 28 31 Totals Calculations: Unit cost of inventory purchased (a) = Total cost \/ Total number of units Jan. 7 purchase: = = = (b) Jan. 22 purchase: = = (c) Units adjustment for inventory shrinkage: per physical count per inventory records adjustment needed Inventory on Hand Unit Total Cost Cost Date Jan. 2 Accounts and Explanation Debit Credit Available accounts for journal entries: Jan. 2 Jan. 7 Jan. 18 Jan. 19 Jan. 20 Jan. 21 Jan. 22 Jan. 24 Jan. 28 For cost of inventory purchased remember to add freight in Cash Service Revenue Prepaid Rent Cash Software Inventory Accounts Payable Accounts Receivable Sales Revenue Cost of Goods Sold Software Inventory Accounts Receivable Service Revenue Salaries Payable Salaries Expense Cash Accounts Payable Cash Software Inventory Accounts Payable Utilities Expense Cash Cash Sales Revenue Cost of Goods Sold Software Inventory Bal. Jan. 2 Jan. 28 Cash 16,400 Jan. 2 Jan. 20 Jan. 21 Jan. 24 Jan. 21 Accounts Payable 4,700 Service Revenue Bal. Jan. 7 Jan. 22 Bal. Jan. 2 Jan. 19 Bal. Bal. Bal. Jan. 18 Jan. 19 Bal. Bal. Jan. 7 Jan. 22 Bal. Bal. Bal. Bal. Jan. 2 Accounts Receivable 1,750 Software Inventory 0 Jan. 20 Salaries Payable 685 0 Sales Revenue Bal. Bal. Jan. 18 Jan. 28 Bal. Unearned Revenue Cost of Goods Sold Jan. 18 700 Bal. Jan. 18 Jan. 28 700 Bal. Jan. 28 Bal. Bal. Bal. Jan. 20 Bal. Office Supplies 200 200 Davis, Capital 18,165 18,165 Prepaid Rent 0 Davis, Withdrawals Bal. Salaries Expense Utilities Expense 0 Jan. 24 Bal. Bal. . Equipment 1,800 1,800 Rent Expense Accumulated DepreciationEquipment 30 Bal. 30 Bal. Depreciation ExpenseEquipment Furniture 4,200 4,200 Depreciation ExpenseFurniture Bal. Bal. Bal. Bal. Accumulated DepreciationFurniture 70 Bal. 70 Bal. Date Jan. 31 Jan. 31 Jan. 31 Jan. 31 Accounts and Explanation Debit Credit Available accounts for journal entries: Salaries Expense Salaries Payable Depreciation ExpenseEquipment Depreciation ExpenseFurniture Accumulated DepreciationEquipment Accumulated DepreciationFurniture Rent Expense Prepaid Rent Cost of Goods Sold Software Inventory Bal. Jan. 2 Jan. 28 Cash 16,400 Jan. 21 Accounts Payable 4,700 Jan. 20 Jan. 2 Jan. 20 Jan. 21 Jan. 24 Salaries Payable 685 Service Revenue Bal. Jan. 7 Jan. 22 Bal. Jan. 2 Jan. 19 Bal. Bal. Bal. Jan. 18 Jan. 19 Bal. Accounts Receivable 1,750 Software Inventory Jan. 7 Jan. 22 Sales Revenue Bal. Adj. Bal. Unearned Revenue 700 Bal. 700 Bal. Jan. 18 Jan. 28 Adj. Bal. Bal. Bal. Office Supplies 200 200 Davis, Capital 18,165 18,165 Prepaid Rent Jan. 2 Bal. Bal. Bal. Adj. Equipment 1,800 1,800 Accumulated DepreciationEquipment 30 Bal. Adj. Bal. Bal. Bal. Furniture 4,200 4,200 Accumulated DepreciationFurniture 70 Bal. Adj. Bal. Bal. Davis, Withdrawals 0 Jan. 18 Jan. 28 Bal. Cost of Goods Sold Jan. 18 Jan. 28 Adj. Bal. Salaries Expense Bal. Bal. Jan. 20 Adj. Bal. Utilities Expense Jan. 24 Bal. Rent Expense Adj. Bal. Depreciation ExpenseEquipment Adj. Bal. Depreciation ExpenseFurniture Adj. Bal. DAVIS CONSULTING Adjusted Trial Balance January 31, 2015 Account Title Balance Debit Cash Accounts Receivable Software Inventory Office Supplies Prepaid Rent Equipment Accumulated DepreciationEquipment Furniture Accumulated DepreciationFurniture Accounts Payable Salaries Payable Unearned Revenue Davis, Capital Service Revenue Sales Revenue Cost of Goods Sold Salaries Expense Utilities Expense Rent Expense Depreciation ExpenseEquipment Depreciation ExpenseFurniture Total Credit P545 Journalizing purchase and sale transactions, making closing entries, preparing financial statements, and computing the gross profit percentage This problem continues the Davis Consulting situation from Problem P439 of Chapter 4. Davis Consulting performs systems consulting. The company has also begun selling accounting software and uses the perpetual inventory system to account for software inventory. During January, Davis Consulting completed the following transactions: Jan. 2 Completed a consulting engagement and received cash of $7,800. Jan. 2 Prepaid three months office rent, $1,650. Jan. 7 Purchased 80 units software inventory on account, $1,680, plus freight in, $80. Jan. 18 Sold 40 software units on account, $3,500 (cost $880). Jan. 19 Consulted with a client for a fee of $1,000 on account. Jan. 20 Paid employee salaries, $2,055, which includes accrued salaries from December. Jan. 21 Paid on account, $1,760. Jan. 22 Purchased 240 units software inventory on account, $6,240. Jan. 24 Paid utilities, $250. Jan. 28 Sold 120 units software for cash, $4,680 (cost $2,960). Jan. 31 Recorded the following adjusting entries: a. Accrued salaries expense, $686 b. Depreciation, $100 (Equipment, $30; Furniture, $70) c. Expiration of prepaid rent, $550 d. Physical count of software inventory, 145 units, $3,770 Requirements 1. Open the following Taccounts in the ledger: Cash, $16,400; Accounts Receivable, $1,750; Software Inventory, $0; Office Supplies, $200; Prepaid Rent, $0; Equipment, $1,800; Accumulated Depreciation Equipment, $30; Furniture, $4,200; Accumulated DepreciationFurniture, $70; Accounts Payable, $4,700; Salaries Payable, $685; Unearned Revenue, $700; Davis Capital, $18,165; Davis, Withdrawals, $0; Income Summary, $0, Service Revenue, $0; Sales Revenue, $0; Cost of Goods Sold, $0; Salaries Expense, $0; Rent Expense, $0; Utilities Expense, $0; Depreciation ExpenseEquipment, $0; and Depreciation Expense Furniture, $0. 2. Journalize and post the January transactions. Compute each account balance, and denote the balance as Bal. 3. Prepare the month ended January 31, 2015 income statement of Davis Consulting. Using the multi-step format. List Service Revenue under gross profit and ignore classifying the expenses as selling and administrative. 4. Journalize and post the closing entries. Denote each closing amount as Clo. After posting all closing entries, prove the equality of debits and credits in the ledger. 5. Compute the gross profit percentage of Davis Consulting", "transcribed_text": "", "related_book": { "title": "Managerial Accounting Tools for Business Decision Making ", "isbn": "1118856996, 978-1118856994", "edition": "4th Canadian edition", "authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1190.jpg", "uri": "\/textbooks\/managerial-accounting-tools-for-business-decision-making-4th-canadian-edition-1190", "see_more_uri": "" }, "free_related_book": { "isbn": "0415682401", "uri": "\/textbooks\/was-stalin-really-necessary-some-problems-of-soviet-economic-policy-1st-edition-978-0415682404-283778", "name": "Was Stalin Really Necessary Some Problems Of Soviet Economic Policy", "edition": "1st Edition" }, "question_posted": "2024-06-28 07:04:42", "see_more_questions_link": "\/study-help\/questions\/business-corporate-finance-2020-July-01", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/spacecraft-inc-is-a-large-corporation-that-is-audited-regularly", "description": "Spacecraft, Inc., is a large corporation that is audited regularly by a public accounting firm but also maintains an internal auditing staff. 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